Minister of Investment and Downstream Industry, Rosan P. Roeslani, says that foreign direct investment (FDI) in Indonesia fell by 12.23 percent in the second quarter (Q2) of 2025, dropping from Rp230.4 trillion (US$14 billion) in the first quarter to Rp202.2 trillion.

He attributed the decline to escalating geopolitical tensions in several regions, while noting that these global uncertainties have made it more challenging to attract foreign capital during the April–June period, as global competition for FDI becomes increasingly intense.

“The United States, for instance, is encouraging American companies abroad to bring their investments back home. That’s something we have to navigate carefully,” Rosan said at his office on Tuesday, July 29, 2025.

According to Rosan, nearly 80 percent of FDI in Q2 came from just five countries: Singapore, Hong Kong, China, the United States, and Malaysia. Notably, 28.8 percent of this investment (about US$3.6 billion) was directed toward the basic metals industry, including metal goods (excluding machinery and equipment).

As FDI declined, domestic investment accounted for a higher share of total investment, rising to 57.7 percent in Q2 2025. Despite the foreign drop, total investment still grew 11.5 percent year-on-year, reaching Rp477.7 trillion.

To boost foreign investor confidence, Rosan emphasized the importance of legal certainty. He cited the new Government Regulation No. 28/2025, which allows the Ministry of Investment to approve business permits on behalf of 17 other ministries and agencies if they miss regulatory deadlines.

“Sometimes we have good policies, but if they’re not well-socialized, investors won’t know. That’s why we need to be proactive in outreach,” he said.

Rosan, who also serves as CEO of the Daya Anagata Nusantara Investment Management Agency (BPI Danantara), said the company plays a key role in attracting foreign investment by increasing investor confidence in local projects.

Danantara is a holding company for all Indonesian state-owned enterprises. Rosan views Danantara’s participation in a project as equivalent to direct government involvement, assuring long-term commitment and project viability.

“A project backed by Danantara is highly credible and has strong investment potential. But I admit, attracting FDI right now is not easy,” he said.